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🇬🇧 UK Sole Trader · 2025/26 · Updated April 2025

UK Self-Employed
Tax Calculator — 2025/26

Calculate your income tax and Class 4 NI as a UK sole trader or freelancer. Covers England, Wales, NI and Scotland. Includes your Payments on Account schedule.

Updated April 2025: Class 2 NI abolished from April 2024 — no more flat weekly charge. Class 4 NI cut to 6% (was 9% until January 2024). Income tax thresholds frozen through 2027/28.
£12,570
Tax-free personal allowance 2025/26
6%
Class 4 NI rate (cut from 9% in 2024)
£0
Class 2 NI — abolished April 2024
31 Jan
Self-assessment payment deadline
£ / yr
£ / yr
Net profit
£—
after expenses
Total tax
£—
income tax + NI
Take-home pay
£—
per year
⚠️ Estimate only. This calculator covers income tax and Class 4 NI for sole traders and partnerships. It does not model student loan repayments, pension contributions, Gift Aid, marriage allowance, or other adjustments. Personal allowance taper (above £100,000) is modelled. For companies or partnerships with mixed income sources, consult a qualified accountant.

If your self-assessment tax bill exceeds £1,000 and less than 80% of your tax is collected via PAYE, HMRC requires advance payments toward your next year's bill — called Payments on Account. Each payment is 50% of your previous year's bill.

£
First year as self-employed? Your first self-assessment will feel like a double bill: you pay the full year's tax plus the first Payment on Account — all by 31 January. Use the calculator above to see your exact total due date.
⚠️ Payments on Account only cover income tax and Class 4 NI. Capital gains tax, student loan repayments, and Class 2 NI (now abolished) are excluded. If you expect lower income next year, you can apply to reduce your PoA via HMRC Self Assessment (SA303 form), but interest is charged if you underestimate.

Scotland has its own income tax bands — six rates instead of three, set by the Scottish Parliament. Class 4 NI is the same across all UK regions. Enter a net profit below to see the exact income tax difference.

£ / yr
⚠️ Scotland income tax comparison covers income tax only. Class 4 NI is identical across all UK regions and is shown separately. Scotland rates and thresholds for 2025/26 are set by the Scottish Budget. Welsh rates currently match England.

How UK Self-Employed Tax is Calculated

As a sole trader or freelancer, your tax is based on your net profit — your total business income minus allowable expenses. There is no employer paying contributions on your behalf; you are responsible for calculating and paying everything through Self Assessment.

Two taxes apply to your net profit:

1. Income Tax

Charged on net profit above your Personal Allowance (£12,570 in 2025/26). In England, Wales and NI: 20% basic rate up to £50,270, then 40% higher rate up to £125,140, then 45%. Scotland uses six bands — see the England vs Scotland tab above for a full comparison.

2. Class 4 National Insurance

Also charged on net profit, at 6% on profits between £12,570 and £50,270, and 2% above £50,270. Class 4 NI was 9% until January 2024 — the current 6% rate took effect from April 2024. Class 4 rates are identical across England, Wales, NI and Scotland.

Both taxes are paid via Self Assessment: file your return and pay by 31 January following the end of the tax year (5 April). If your bill exceeds £1,000, HMRC will also require advance Payments on Account — see the tab above for your schedule.

Formula
Gross income − Allowable expenses = Net profit → Income tax + Class 4 NI

What Changed in 2024/25 and 2025/26

Class 2 NI abolished — April 2024

The flat weekly charge of £3.45 (£179.40/year) no longer applies to self-employed people with profits above the Small Profits Threshold. This saves most sole traders around £180 per year automatically — no action required. Those with profits below £6,845 can still pay voluntarily to protect State Pension entitlement.

Class 4 NI cut to 6% — April 2024

Class 4 NI was cut from 9% to 8% from January 2024, then further to 6% from April 2024. For a sole trader with £50,000 net profit, this represents a saving of approximately £1,131/year compared to the pre-2024 rate (£37,430 × 3% difference). The 2% rate above £50,270 is unchanged.

Income tax thresholds frozen through 2027/28

The Personal Allowance (£12,570), Basic rate upper threshold (£50,270), and Higher rate threshold (£125,140) are all frozen in England, Wales and NI until at least 2027/28. As incomes rise with inflation, more profit is pushed into higher bands — this is called "fiscal drag." The 2025/26 and 2026/27 England bands used in this calculator are identical.

Allowable Business Expenses

You can deduct expenses that are incurred "wholly and exclusively" for business purposes. These reduce your net profit — and therefore your tax bill. Common categories:

Category What you can claim
Equipment & tools Laptop, camera, microphone, specialist tools — used exclusively for work. Larger purchases go through Annual Investment Allowance (100% first-year deduction).
Software & subscriptions Adobe CC, project management tools, cloud storage, professional databases — recurring costs are deductible in full.
Home office Simplified flat rate: £6/week (no receipts needed). Or claim a proportion of actual bills (heating, electricity, broadband) based on rooms and hours used for work.
Business travel HMRC approved mileage: 45p/mile for first 10,000 miles per year, 25p/mile after. Train/taxi fares for business trips. Commuting to a regular place of work is not deductible.
Professional fees Accountant fees, legal advice for business contracts, professional indemnity insurance, business bank fees.
Marketing Website hosting and design, paid advertising, business cards, portfolio platforms.
Training Courses and training that maintain or improve skills in your existing trade. Training to enter a new trade is not deductible.
Trading Allowance alternative: If your total business income is £1,000 or under, you can use the Trading Allowance instead of claiming individual expenses — no receipts or record-keeping needed. Above £1,000, claim actual expenses as above.

Payments on Account: What Every New Freelancer Must Know

Payments on Account is the part of the UK tax system that catches the most new self-employed people off guard. Here is how it works.

The First-Year Trap

In your first year of self-employment, your January tax deadline hits harder than any subsequent year. By 31 January, you must pay:

Your full 2024/25 tax bill (balancing payment) 100%
Plus: 1st Payment on Account for 2025/26 +50%
Total due on 31 January Up to 1.5× your tax bill

Six months later, the 2nd Payment on Account (the remaining 50%) is due by 31 July. Use the Payments on Account tab above to calculate your exact schedule.

How to Reduce Your Payments on Account

If you expect your income to be significantly lower next year — for example if you take parental leave, go part-time, or lose a major client — you can apply to reduce your Payments on Account using HMRC's SA303 form in your online Self Assessment account. However, if you reduce too much and your actual bill is higher than expected, HMRC will charge late payment interest on the shortfall.

Scotland vs England: What's Different for Freelancers

If you live in Scotland, your income tax is set by the Scottish Parliament — not Westminster. The key differences that affect freelancers:

Band England / Wales / NI Scotland 2025/26
Personal Allowance 0% up to £12,570 0% up to £12,570
Lowest rate 20% from £12,571 19% Starter rate from £12,571
Middle bands — 20% Basic / 21% Intermediate (to £43,662)
Higher rate kicks in 40% from £50,271 42% from £43,663
Top rate 45% above £125,140 48% above £125,140
Class 4 NI 6% / 2% 6% / 2% (same)

Bottom line: Scottish sole traders with profits above £27,491 generally pay more income tax than those in England — the Intermediate rate (21%) and earlier Higher rate threshold (£43,663 vs £50,271) both add to the bill. Use the England vs Scotland tab above to calculate the exact difference for your income level.

Scottish taxpayer? Your PAYE tax code will start with S (e.g. S1257L). For Self Assessment, HMRC automatically applies Scottish rates when you confirm your address is in Scotland on your return.

Frequently Asked Questions

Do I still pay Class 2 National Insurance as a self-employed person?
No. Class 2 NI was abolished from 6 April 2024. Before that, self-employed people paid a flat £3.45/week. Now, the only NI a sole trader pays is Class 4 — 6% on profits between £12,570 and £50,270, and 2% above. If your profits are below the Small Profits Threshold (£6,845 in 2025/26), you can still pay Class 2 voluntarily to protect your State Pension qualifying year.
What's the difference between Scottish income tax and English income tax for self-employed people?
Scotland uses six income tax bands instead of three. The most significant differences: Scotland's Intermediate rate of 21% applies from £27,492, and the Higher rate of 42% kicks in at £43,663 — compared to England's 40% Higher rate which only starts at £50,271. Most Scottish sole traders with profits above £27,000 pay more income tax. Class 4 NI is identical across all UK regions — only income tax differs. Use the England vs Scotland tab above to see the exact figures for your profit level.
When does HMRC require Payments on Account?
HMRC requires Payments on Account when two conditions are both met: your Self Assessment tax bill (income tax + Class 4 NI) exceeds £1,000, AND less than 80% of your tax was collected at source via PAYE. Each payment is 50% of your previous year's bill — one due 31 January, one due 31 July. In your first year of self-employment, 31 January can feel like a double bill: you pay your full first-year tax plus the first Payment on Account, which can total up to 1.5× your annual tax bill. The Payments on Account tab above calculates your exact schedule.
What business expenses can I deduct from my UK freelance income?
You can deduct expenses incurred "wholly and exclusively" for business: equipment (laptops, tools), software subscriptions, home office costs (simplified £6/week flat rate or proportionate actual bills), business travel (45p/mile for the first 10,000 miles/year, 25p/mile after), professional fees (accountant, insurance), marketing, and business-relevant training. The Trading Allowance (£1,000) can be used instead of claiming actual expenses if your total business income is £1,000 or under — no receipts needed.
How does the £100,000 personal allowance taper affect me?
Once your net profit exceeds £100,000, your Personal Allowance reduces by £1 for every £2 above that threshold. It is fully withdrawn at £125,140. This creates an effective 60% marginal rate on income in the £100,000–£125,140 range: you pay 40% higher rate tax, plus lose 50p of tax-free allowance for each £1 earned (worth another 20p in tax). This calculator models the PA taper automatically. One strategy: pension contributions reduce your adjusted net income and can partially restore your Personal Allowance — worth discussing with an accountant if you're close to £100k.
When are my self-assessment tax payments due?
There are two main payment deadlines per year. 31 January: pay your balancing payment for the previous tax year (e.g. your 2025/26 bill by 31 Jan 2027) plus your 1st Payment on Account for the current year. 31 July: pay your 2nd Payment on Account. File your online return by 31 January (paper returns by 31 October). HMRC charges interest on late payments from the deadline date, plus penalty charges for returns filed more than three months late.

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